More than a third of Britons (36%) worry about how they will pay their rent or mortgage, according to a recent Ipsos poll. Yet millions of people could save money by switching from their bank’s standard variable rate to a better deal.
As the cost of living crisis continues to be felt, one of the biggest expenses for many people right now is mortgage payments.
But despite this, many people don’t remortgage when the time comes, which could save them hundreds of pounds a month or thousands of pounds over the course of a year.
Mortgage expert Daniel Knott told Express.co.uk how a person’s mortgage options can change significantly over the course of five years.
He said: ‘I recently completed a mortgage for a landlord who was coming to the end of his five year fixed term product.
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Meanwhile, some homeowners are paying hefty fees to terminate their fixed rate mortgages early – before interest rates rise again.
The Bank of England’s base rate has risen to 1.25%, but experts predict it could double over the next year.
Mr Knott said this could work for some people: “If you want to remortgage at a lower rate and the savings you will realize on the new mortgage is more than the cost of the prepayment charges and fees associated with your new mortgage, so remortgaging sooner could be a good financial decision.
It’s also important to note that people can get their next mortgage contract up to six months before the end of their current fixed-term contract.
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Meanwhile, if people can afford to overpay mortgages, it’s a great way to save thousands of pounds on interest charges.
Mr Knott warned: “Before you overpay your mortgage, you should clarify whether your mortgage product has any overpayment restrictions.
“Common maximum limits are 10% of the initial balance or 10% of the outstanding balance.
“Any overpayment made beyond this limit may incur a prepayment charge.”
A single mum from Andover in Hampshire recently told Express.co.uk how she has completely paid off her mortgage despite being a single mum to twin daughters.
Claire Hattrick was just 47 when she made her last mortgage payment and says that while she had to make some sacrifices, it was definitely worth it.
She told Express.co.uk: ‘Never over-mortgage yourself because you never know what interest rates are likely to do.
“Save in your youth. It’s amazing how much that little birthday money you got and didn’t spend can help you later in life.”